Weak demand is increasing the risk of the Chinese economy falling into deflation, and there is little reason to be optimistic. The administration of President Xi Jinping should act quickly to take the necessary measures to prevent the economy from stalling.
China's gross domestic product increased 6.3% in real terms in the April-June quarter from a year earlier. That is up from 4.5% for the January-March period and above the government target of about 5% for all of 2023. However, the latest figure cannot be taken at face value: The April-June period of 2022 saw growth of only 0.4% because of the lockdown in Shanghai; the expansion of over 6% for the same period this year is simply a reaction to that.
